CWA Blog Article - Nov 2023

Why It Is Important to Keep Your Beneficiaries Up to Date in Your Estate Planning Documents

Estate planning is the process of creating a plan for how your assets will be distributed after you die. It is an important process for everyone, regardless of age or wealth. One of the most important parts of estate planning is keeping your beneficiaries up to date.

Your beneficiaries are the people who will inherit your assets after you die. You can name beneficiaries for your bank accounts, retirement accounts, insurance policies, and other assets. It is important to keep your beneficiaries up to date to ensure that your assets are distributed to the people you want to inherit them.

Here are some of the reasons why it is important to keep your beneficiaries up to date:

• To ensure that your wishes are carried out. When you create your estate planning documents, you specify who you want to inherit your assets and how you want them to be distributed. If your beneficiaries are not up to date, your assets may not be distributed according to your wishes.
• To avoid probate disputes. Probate is the legal process of settling an estate. If your beneficiaries are not up to date, it could lead to probate disputes between your loved ones.
• To protect your loved ones. If you have minor children or dependents, it is important to name a guardian for them in your estate planning documents. If you do not name a guardian, the court will appoint one, and it may not be the person you would have chosen.

Life changes that may prompt a change in beneficiaries

There are many life changes that may prompt a change in beneficiaries, such as:

• Marriage or divorce. If you get married or divorced, you will likely want to add or remove your spouse as a beneficiary.
• Birth or death of a child. If you have a child or grandchild, you may want to add them as a beneficiary. If a child dies, you will want to remove them as a beneficiary.
• Death of a spouse or beneficiary. If your spouse or another beneficiary dies, you will need to update your beneficiaries.
• Change in financial situation. If your financial situation changes, you may want to update your beneficiaries to ensure that your assets are distributed according to your current wishes.

How to keep your beneficiaries up to date

There are a few things you can do to keep your beneficiaries up to date:

• Review your estate planning documents regularly. It is a good idea to review your estate planning documents every few years, or whenever there is a major life change. This will help you ensure that your beneficiaries are up to date and that your wishes are still being carried out.
• Notify your financial institutions of any changes. If you make a change to your beneficiaries, you need to notify your financial institutions. This includes banks, retirement plan administrators, and insurance companies.
• Keep a copy of your estate planning documents in a safe place. You should keep a copy of your estate planning documents in a safe place where your loved ones can easily find them after you die.

Keeping your beneficiaries up to date is an important part of estate planning. It will help ensure that your assets are distributed according to your wishes and protect your loved ones. If you have any questions about how to keep your beneficiaries up to date, you should consult with an estate planning attorney. If you need names of local attorneys that can help, please contact us and we can provide a list of reputable professionals in our area.

Any opinions are those of Allison Wilson and not necessarily those of Raymond James. Certified Financial Planner Board of Standards Inc. owns the certification mark CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax or legal issues, these matters should be discussed with the appropriate professional.